In the New Keynesian open economy model, if the exchange rate is fixed
A) fiscal policy and monetary policy are powerless.
B) fiscal policy is an effective stabilization tool.
C) a change in current total factor productivity increases output.
D) monetary policy is an effective stabilization tool.
B
Economics
You might also like to view...
The outcome of the Stackelberg model is
A) a Nash equilibrium. B) the same as the Cournot outcome. C) that the follower earns zero profit. D) that the follower cannot be on its best-response curve.
Economics
If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent, the expected real interest rate is _____
a. 13 percent b. ?5 percent c. 9 percent d. ?13 percent e. 5 percent
Economics